Different car finance options available to you


Do you know the different car finance options that are available? If you are thinking about getting yourself a new car, make sure you know your options first. We’ve listed some of the options out there so you are up to speed.

Hire Purchase (HP)

Hire Purchase is a type of car finance where you will generally pay a deposit and be required to meet fixed monthly payments towards the value of the car.

  • Pro: Hire Purchase can help you get a car with a low initial deposit.
  • Con: The car is only 100% yours after you make the last payment on it.

Personal Contract Purchase (PCP)

Personal Contract Purchase also requires an initial deposit followed by monthly payments, but you are covering the amount of depreciation against the car.

  • Pro: Tend to have lower monthly payments than with Hire Purchase deals.
  • Con: Exceeding the mileage can usually result in additional charges.

Personal Contract Hire (PCH)

Personal Contract Hire deals are where you pay a dealer a fixed monthly amount to use a car, with the likes of servicing and maintenance all included.

  • Pro: You do not have to worry about the car depreciating in value.
  • Con: The car is never yours as you give it back at the end of the term.

Personal Loan

Personal Loans allows you to borrow a certain amount of money to cover the cost of a car (doesn’t have to be for the whole cost) and repay it over a number of years.

  • Pro: It can cover the whole cost of the car, meaning you can own it straight away.
  • Con: You may need to wait for funds to be paid into your bank account.

If you think a Personal Loan might be right for you, try our free loan calculator to find a quote that may suit you.

  • The information provided in this article is for guidance and educational purposes only. Police Credit Union Ltd. does not offer regulated financial advice. Please seek independent financial advice.

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